China Beats EU to Turkmen Gas

Turkmenistan and China inaugurated a major new gas pipeline on Monday (14 December), complicating the EU's energy ambitions in Central Asia.

Chinese leader Hu Jintao switched on the gas at a ceremony on the Turkmen-Uzbek border with Turkmen president Gurbanguly Berdymukhammedov and the leaders of Uzbekistan and Kazakhstan.

The 1,833 km pipeline passes through Uzbekistan and Kazakhstan before reaching Xinjiang in China. It will pump 40 billion cubic metres of gas a year—about half the consumption of Germany—when it is in full swing in 2012.

The development highlights the difficulties surrounding EU efforts to get direct access to Turkmenistan's gas, breaking Russia's monopoly on EU-bound exports from the region.

"Everybody thinks we are in competition with Russia in Central Asia. But we are also in competition with China, and to a lesser extent, with Iran," an EU official said.

The Chinese pipeline was built in lightning speed.

China and Turkmenistan signed a preliminary agreement on the project in April 2006. Construction began in August 2007 and was completed 27 months later by an army of 8,000 workers.

In contrast, EU firms signed the first agreement on the Nabucco pipeline, designed to bring in gas from Turkmenistan and other countries in the region via Turkey, in 2002. It launched a wide-sweeping Central Asia strategy in 2007 and ratified a basic trade agreement with Turkmenistan in late 2009.

As of the end of this year no EU company has a gas contract with Turkmenistan and not one kilometre of the 3,300 km project has been built.

Early drafts of the Central Asia strategy said that EU concerns with human rights abuses in the region could hold back the union's interests. Unwillingness by EU companies to pay a huge bribe to Mr Berdymukhammedov's predecessor also stymied progress.

The Chinese pipeline does not directly threaten Russia's monopoly on gas exports to the EU but it challenges Russia's influence in the three post-Soviet states.

"I hope that, thanks to this investment we will be not just good neighbours, but also faithful partners," Mr Hu said at the ceremony.